Implementation of the Transparency Directive imposes new obligations on issuers of securities

29 January 2016News

The implementation of the Transparency Directive means that issuers of securities will have to meet a number of new obligations. All securities-issuing institutions admitted to trading on a regulated market in the European Union will be obliged to state their home member state. Institutions need to make this information public before 27 February 2016. This obligation is one of the changes to the Dutch Financial Supervision Act (Wet op het financieel toezicht, or ‘Wft’).

The Amended Transparency Directive (Implementation) Act has been passed by the Dutch House of Representatives and the Dutch Senate in December 2015. This enshrines the amended Transparency Directive in Dutch law. It also leads to changes to the Wft.

The changes to the Wft, take effect as of 29 January 2016, and affect several issues, the most important of which are:

the obligation for securities-issuing institutions to state their home member state;

the removal of the obligation to make interim statements generally available;

the introduction of publication of an annual report on payments to governments for specific business sectors; and

certain changes with respect to shareholder notifications.

Specific details of the changes are explained in the published Implementation Act.

The AFM will publish the main questions and answers relating to the changes in shareholder notifications on its website in the near future.

I would like to obtain approval of a prospectus; what documents should I submit together with my application for approval?

How can I be sure that the application for approval or a new draft has been received by the AFM in good order?

Application for approvalAfter your application for approval has been sent to Service.Prospectus@afm.nl, you will receive an automatic confirmation of receipt from the AFM. In case you did not receive such confirmation, please contact the secretariat of the Securities Offerings and Takeover Bids Division at +31-(0)20-797 2896. An application for approval may not exceed 9 MB.

New draft(s)After a new draft has been sent to the AFM, please contact the person handling the relevant transaction in order to be sure that the new draft has been received in good order.

What is important to note when incorporating information by reference in the prospectus?

The regulations in relation to prospectuses allow for information to be incorporated by reference. The aim hereof is to simplify and reduce the costs of drafting a prospectus. However, as set out in Consideration 30 of the Prospectus regulation ((EG) Nr. 809/2004), this aim should not be achieved to the detriment of other interests the prospectus is meant to protect. Article 28.5 of the Prospectus regulation requires that the parties drafting the prospectus endeavour not to endanger investor protection. All information should be comprehensible and accessible to the investor.

The AFM has noted that in many instances the comprehensibility and accessibility has been at risk. Using too many separate documents causes fragmentation. In addition, it is often not easy to obtain the separate documents.

The AFM will pay particular attention to compliance with Article 28.5 of the Prospectus regulation in order to limit the number of separate documents and improve the accessibility of the information. In particular through clear identification of and reference to the separate documents. In addition, the investors should be able to easily obtain the documents.

The information incorporated by reference is as important as the information in the “main document” and should be equally accessible and comprehensible.

What is the maximum size of emails with attachments that the AFM server can handle? What is the maximum size of pdf documents that the AFM server can handle?

The maximum size of an email sent to service.prospectus@afm.nl is 9 MB and such email can then be opened and read by the relevant person within the Securities Offerings Division. The maximum size of an email sent directly to the individual email address of a person within the Emissions team is 5 MB. A PDF document should never exceed 9 MB. See also Procedure for requesting approval